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1/21/2017 Investment House Daily
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The REPORT SCHEDULE is as follows:
Market Summary Video, Plays and Play Videos, and Play Table with play
annotations will issue Wednesday, Weekend.
Monday a Market Summary video, new plays, play table annotations.
Tuesday and Thursday reports will contain the market summary, chart links to
view the index charts, and updated play table.
Access to all current videos will remain assessable each day using the play
links in the reports.
If any market circumstances arise where we see additional plays we want to
prepare for the next session, we will of course issue those plays regardless
of the day of the week.
MARKET SUMMARY
- Inauguration in the books, Trump presidency starts, market still waiting
to see what happens.
- Earnings beats, earnings misses fairly evenly split in what is thus far a
let down season.
- PBOC lowers reserve requirements, an odd move given how it is supposedly
improving economically.
- Plenty of good stocks in good positions ready to go if they get a reason
to do so.
Inauguration day. Some thought it the greatest event ever, some thought it
was the worst event ever. The stock market gave it a lukewarm reception.
Not a thumbs down, just holding their position until investors and traders
hear more about the policies Trump puts out and with how much howling the
democrats AND republicans respond. It will also be a matter of timing, i.e.
how fast they come out. There is a lot of anticipation that the new
administration was ready to go with a plan in hand. There were some orders
regarding the ACA and word from Priebus of a government-wide freeze on
regulations. A start, but of course the market wants more and wants them
now.
SP500 7.62, 0.34%
NASDAQ 15.25, 0.28%
DJ30 94.85, 0.48%
SP400 0.49%
RUTX 0.45%
SOX 1.30%
VOLUME: NYSE +32%, NASDAQ -6%. NYSE trade jumped above average as a lot of
trades were made but on both sides of the ledger as the NYSE gains were
limited. NASDAQ volume faded from just below average as it held steady at
the 10 day EMA. Lots of undecideds on the session.
A/D: NYSE 1.8:1, NASDAQ 1.6:1.
Lost in the pageantry of the inauguration and the vandalization and criminal
mischief of the 'protests' a few blocks over, was other news. Some seemed
rather important but again, it was lost in the inaugural festivities that
some covered with delight, others covered with sneers and 'we are doomed'
tweets and comments.
China: The PBOC announced it lowered its reserve requirements for banks.
It also injected massive amounts of yuan overnight yet again. All is not
well, not well at all, in China. It is going to find out that its desperate
attempt to continue injecting money into the economy and piling stimulus
program after stimulus program in order to outrun economic rollover has not
worked. It knows the plan is not working and thus is trying other things in
order to keep the masses placated, e.g. aggressive and indeed provocative
actions in the South China Sea, talking tough against the US regarding trade
and Taiwan. Keep the people looking outside the country to assign blame as
to why things at home are not going that well. It works inside a country as
well: the republicans and democrats blame each other all the time for the
inability to accomplish anything, then go back to their constituents and say
there was nothing they could do, the other side blocked them, was being
mean, etc. Sadly, we all know THAT story. I wonder if the Chinese people
get as mad about it as we do? Hmmm.
Australia: Nothing economic, just tragic. A car plowed into a crowd,
killing four, injuring 20. Reportedly the perpetrator had ISIS-related
intentions.
Earnings: NFLX reported strong earnings Wednesday night and gapped higher,
but thus far has not made the kind of gap and surge as it did in October.
Other results are a mixed bag:
Beats: SWKS; NFLX; PG; IBM (but revenue fell for the nineteenth quarter);
GS; CAL; JPM
Misses: GE (top line); AXP (bottom line); C (TL); BAC (TL); BLK (TL); WFC
(BL, TL); CSX
Hardly the kind of reports that herald the end of the earnings recession.
Oh sure you had the bald-headed guy on CNBC, as usual, shorting and blowing
about how good the financial earnings are, etc., but they certainly are not
driving stocks higher, not even the beats. At least for now.
THE MARKET
No change outside of SOX and its 1.3% move as SWKS' earnings surged chips.
Perhaps SOX will be enough to gin up the rest of the market from its lateral
doldrums, but it could not do it with any authority Friday.
As noted Thursday, the buyers and sellers are evenly balanced as the indices
work laterally in a 6 week range. The risk outweighs the reward given the
move higher, the inability to make a new break upside, and the bullish
sentiment putting in a second week over 60% out of the past three weeks.
The 60% level has accurately capped market upside moves for the past twenty
years.
Even a breakout from the range upside is suspect. With the 60% readings the
market should have a built in governor on any further moves. Of course, if
the Trump administration strikes the right chords with its deregulation and
executive orders it could perhaps reset the lifespan of the rally and break
stocks back upside in a new run that could perhaps rival the post-election
run.
That is speculation. There are patterns good enough to do it; makes sense
given the 6 week lateral move.
Even in the event of a new breakout that occurs on news of Trump actions, I
believe the rally has to be viewed as suspect thanks to the sentiment
levels. Doesn't mean you don't participate, just that you have to
acknowledge the bullishness level as an additional risk to a new break
higher.
CHARTS
Not a lot of change, not a lot new to discuss in the 6 week lateral moves.
SOX: Gapped upside on the SWKS earnings results and guidance hike. Even
with the gap this was not a really strong move as SOX faded off the session
high, still well below the December peak. Trending higher of course, but
even with some really good earnings from a big AAPL supplier, the move was
not blowout.
DJ30: recovered from its Thursday break to a lower low in the 6 week double
toppish pattern. Strong volume on the session, but it was expiration so
volume is not that big a deal. It is holding and for now that buys it time.
NASDAQ: Tight doji Friday at the 10 day EMA as NASDAQ continued trending
upside though slowing a bit on the week as the big name NASDAQ stocks took a
breather after a good move. Mostly holding the gains, still in very good
shape to continue the trend higher.
SP500: And still in the tight lateral range for three weeks, part of the
six week lateral move. Holding the 2016 trendline though weaker MACD at the
highs. Waiting, waiting, waiting for a sign so it can move.
SP400: Very similar to the other NYSE indices, holding at the 20 day EMA in
the six week range, lighter MACD.
RUTX: Sold back to the bottom of the range on the week, holding the
November high on the Thursday lower close. Very important support level for
RUTX.
LEADERSHIP
There is software, materials, chips, some drugs, metals, chemicals,
industrials, Chinese stocks and more in some good patterns. Indeed some
materials stocks are already breaking higher. There are definitely a number
of stocks that can move if the market resumes the rally.
Financial: GS is showing a doji just over the 50 day MA's. Perhaps it is
ready to make its move. STT is at the 50 day MA's as well. C, however, has
cracked and is selling below the 50 day MA. BAC is working laterally,
holding the 20 day EMA.
China: Still solid. NTES bounced off the 10 day EMA Thursday and was up
again Friday. BIDU testing the 200 day SMA but still looks good to move.
ATHM still looks solid in its move. SOHU, SINA are starting to set up.
Semis: Some great moves we wish we had grabbed, e.g. AVGO and QRVO. But,
XLNX looks good to go. MU is setting up again, ENPH is very interesting in
the 'unknown' category. RTEC looks nice.
Metals: Still like RS. CENX is one we missed as it rips higher. AKS is at
the 50 day, SID is not bad. FCX looks solid as it comes off the 10 day EMA
tset.
Materials: Stronger. CX surging. EXP could be moving soon (earnings
1/24). USG looks very interesting.
FAANG: FB is testing that big move and could be set up for an entry this
week. AMZN is working laterally over the 10 day EMA as it tests its move.
It too could be set up for a new entry this week but those earnings are
there. AAPL trending up the 10 day EMA. NFLX held up on the earnings gap
higher but needs to show more upside authority. GOOG in its two week tight
lateral range over the 10 day EMA.
MARKET STATS
DJ30
Stats: +94.85 points (+0.48%) to close at 19827.25
Nasdaq
Stats: +15.25 points (+0.28%) to close at 5555.33
Volume: 1.975B (-5.89%)
Up Volume: 963.26M (+343.38M)
Down Volume: 684.46M (-485.54M)
A/D and Hi/Lo: Advancers led 1.58 to 1
Previous Session: Decliners led 2.52 to 1
New Highs: 104 (+12)
New Lows: 39 (-1)
S&P
Stats: +7.62 points (+0.34%) to close at 2271.31
NYSE Volume: 1B (+32.42%)
A/D and Hi/Lo: Advancers led 1.77 to 1
Previous Session: Decliners led 2.89 to 1
New Highs: 95 (+11)
New Lows: 19 (-1)
SENTIMENT INDICATORS
VIX: 11.54; -1.24
VXN: 13.04; -1.02
VXO: 10.5; -1.11
Put/Call Ratio (CBOE): 1; +0.06. Back to 1 after never backing much out
of the 0.90's. Still a rather high level of apprehension/protection buying.
Bulls and Bears: Bulls popped right back up from the one-week dip, posting
the second 60+ close in 3 weeks. Bears, fell back below 17. Showing some
stickiness at the 60+ level
Bulls: 60.60 versus 58.6
Bears: 17.3 versus 18.4
Theory: When everyone is bullish and has put all their capital to work,
where does the ammunition to drive the market come from? There is always
new money to start a new year. After that is used will more money be
coming? That is the question.
Bulls: 60.6 versus 58.6
58.6 versus 60.2 versus 59.8 versus 59.8 versus 59.6 versus 58.8 versus 56.3
versus 55.6 versus 51.0 versus 42.9 versus 41.7 versus 47.1 versus 42.9
versus 46.1 versus 46.7 versus 45.2 versus 44.6 versus 49.0 versus 52.5
versus 55.9 versus 56.7 versus 56.2 versus 54.3 versus 52.9% versus 53.9%
versus 54.4% versus 52.5% versus 47.1% versus 41.6% versus 47.5% versus
45.9% versus 47.3% versus 45.4% versus 35.4% versus 40.2 versus 39.2
Bears: 17.3 versus 18.3
18.3 versus 18.4 versus 19.6 versus 19.6 versus 19.2 versus 19.6 versus 22.3
versus 21.6 versus 23.5 versus 25.7 versus 24.3 versus 23.1 versus 23.8
versus 23.1 versus 22.8 versus 23.1 versus 24.3 versus 22.6 versus 22.8
versus 20.6 Versus 20.2 versus 20.0 versus 20.9% versus 21.2% versus 21.6%
versus 23.3% versus 24.7% versus 24.5% versus 23.8% versus 23.2% versus
23.5% versus 23.8% versus 23.7% versus 24.0% versus 21.7% versus 21.6%
versus 21.7 versus 20.6% versus 21.7% versus 27.8% versus 27.8% versus 28.9%
versus 27.8% versus 30.3% versus 35.4%
OTHER MARKETS
Bonds (10 year): 2.47% versus 2.468%. TLT rallied to the 50 day MA's and
has backed down from there, falling back below them.
Historical: 2.468% versus 2.422% versus 2.372% versus 2.393% versus 2.358%
versus 2.365% versus 2.38% versus 2.962% versus 2.42% versus 2.357% versus
2.45% versus 2.448% versus 2.42% versus 2.48% versus 2.51% versus 2.56%
versus 2.54% versus 2.55% versus 2.54% versus 2.564% versus 2.544% versus
2.59% versus 2.59% versus 2.52% versus 2.473% versus 2.475% versus 2.471%
versus 2.40% versus 2.349% versus 2.39% versus 2.396% versus 2.394% versus
2.454% versus 2.388% versus 2.30% versus 2.31%. versus 2.36% versus 2.355%
versus 2.317% versus 2.30% versus 2.34% versus 2.297% versus 2.219% versus
2.22% versus 2.23% versus 2.14% versus 2.077% versus 1.867% versus 1.83%
versus 1.778%
EUR/USD: 1.07027 versus 1.06394
Historical: 1.06394 versus 1.06381 versus 1.07114 versus 1.06450 versus
1.0624 versus 1.05982 versus 1.0555 versus 1.0585 versus 1.05346 versus
105837 versus 1.0525 versus 1.03914 versus 1.05289 versus 1.05155 versus
1.04357 versus 1.04636 versus 1.0451 versus 1.04368 versus 1.04412 versus
1.0392 versus 1.0407 versus 1.0459 versus 1.0415 versus 1.05094 versus
1.0636 versus 1.06326 versus 1.05586 versus 1.06140 versus 1.07745 versus
1.07194 versus 1.07614 versus 1.06638 versus 1.06631 versus 1.0601 versus
1.0649 versus 1.05699 versus 1.066 versus 1.05910
USD/JPY: 114.390 versus 114.686. Hugging the 50 day EMA.
Historical: 114.686 versus 114.538 versus 112.774 versus 114.473 versus
114.57 versus 114.70 versus 115.811 versus 116.023 versus 116.923 versus
115.93 versus 116.46 versus 117.983 versus 116.739 versus 116.456 versus
116.793 versus 117.41 versus 117.413 versus 117.32 versus 117.537 versus
117.544 versus 117.835 versus 117.453 versus 117.941 versus 118.257 versus
117.397 versus 115.038 versus 115.058 versus 115.20 versus 114.23 versus
113.325 versus 113.993 versus 113.601 versus 113.52 versus 113.945 versus
114.19 versus 112.685 versus 112.44 versus 111.835 versus 113.14 versus
112.445 versus 111.129 versus 110.809
Oil: 53.22, +1.10. Oil has found some footing at the 52 level, managing to
hold but thus far unable to extend the move. Kind of waiting and watching as
are the other markets.
Gold: 1204.90, +3.40. Gold broke through the 50 day MA's Tuesday then
stumbled, giving the move back but managing to close over the 50 day EMA
Friday. Some impressive stamina.
MONDAY
The market indices are in position (perhaps not DJ30, RUTX), many stocks are
in position, but thus far the market cannot find the bids to send stocks
higher again. Trump is in, some executive orders are signed about the ACA,
the National Parks Service lost its Twitter privileges after many of its
'public servants' sent critical tweets about the inauguration. Many will
likely lose their jobs. There is some 'settling out' to take place for
sure.
Looking to 2017 and beyond I feel there could be a significant
reorganization of alliances in the world. Could it be that Russia and the
US have better relations than the US and those countries remaining in the
EU? To that point, many of the smaller economies are asking the question
'why are we in this union?' How about Israel and Iran? Israel is making
overtures to Iran. If Russia's Putin and Trump forge a relationship, where
does that leave China? It could be very interesting, this time perhaps for
China (that old Chinese curse).
Okay, that is all conjecture about the future. What about those executive
orders? Conway says Trump may stop enforcing the ACA's individual mandate.
Speculation as to the first executive orders is not that drastic, not that
cutting. Thus . . . what will propel markets waiting on some real policies
to give the new buy signal?
But that works. You want to see these good setups break higher and not
massively gap upside. As noted many times, there are very good stocks in
very good position to move higher, they just need something to spring them.
Anything can happen in this environment that is scanning headlines to decide
when to move and where to go.
Earnings are flying in now, but thus far they are impacting individual
stocks, not the market overall. After a couple of weeks of results,
however, the direction tends to readjust. With the indices working
laterally it could be that the results finally give a reason to buy. If
they make the moves then we will be buying some, at the same time fully
aware of the 2 out of 3 weeks of sentiment readings over 60% and how that is
ultimately a governor on the rally.
SUPPORT AND RESISTANCE
NASDAQ: Closed at 5555.33
Resistance:
Support:
The 2016 trendline at 5480
The 50 day EMA at 5425
The 50 day SMA at 5410
The November prior all-time high at 5404
5340 is the September and October 2016 twin peaks
5287.61 is the September 2016 high
5271.36 is the August 2016 intraday prior all-time high
5231.94 is the 2015 all-time high
5170 is the October intraday low.
5162 is the early November peak, 5176 is the December intraday peak
The 200 day SMA at 5139
5100 from the April peak and early May peak
5042 is the March 2015 high
5008.57 is the early March 2015 post-bear market high
5007 is the 12/31 upper gap point from that big gap lower
4999 is the October upper gap point
4980 is the June 2016 peak
4969 is the April 2016 recovery high
4960 is the September 2015 intraday high, an important reversal point for
NASDAQ.
4920 is the lower gap point from mid-October 2015, the January 2016 lower
gap point
4916 is the mid-November 2015 low
4899 - 4902 from the September 2015 peak, July 2015 low
4894 is the September 2015 closing high
S&P 500: Closed at 2271.31
Resistance:
2277.53 is the December 2016 high
Support:
The 2016 trendline at 2262
The 50 day EMA at 2236
The 50 day SMA at 2233
The November 2016 all-time high at 2213.25
2194 is the August 2016 prior all-time high
2175 is the June 2016 high
The 200 day SMA at 2150
2135 is the May 2015 all-time high
2130 is the June 2015 peak
2126 was the April 2015 prior all-time high
2120 is the June 2016 peak
2119 is the September 2016 low; February 2015 intraday high
2116 is the November 2015 high
2111 is the April 2016 recovery high
2104 is the December 2015 high
2094 is the December 2014 high
2079 is the intraday all-time high from November 2014
2062 is the January 2015 lower high
2046 is the July 2015 closing low
2040 is the March 2015 closing low
2026 is the May 2016 low
2023 is the November 2015 low
2020 is the September 2015 intraday high
2011 is the September prior all-time high
1995 is the September 2015 recovery peak
1991 is the July 2014 high
Dow: Closed at 19,827.25
Resistance:
19,987.53 is the December 2016 high
Support:
19750 is the lows of the December/January range
The 50 day SMA at 19,497
The 50 day EMA at 19,491
18,669 is the August 2016 all-time high
18,595 is the July 2016 peak
The 200 day SMA at 18,443
18,351 is the prior all-time high from May 2015
18,288 from March 2015
18,262 is the upper gap point from the Monday gap lower.
18,247 is the August 2016 low
18,168 is the April 2016 recovery high
18,100 to 18,181: interim peaks in the December 2014 to July 2015 range
18,016 is the June 2016 peak
17,992 is the early September low
17,978 is the November 2015 peak
17,960 is the October intraday low
17,600 is the rough bottom of the April to June range.
17,351 is the September 2014 all-time high.
ECONOMIC CALENDAR
January 24 - Tuesday
Existing Home Sales, December (10:00): 5.55M expected, 5.61M prior
January 25 - Wednesday
MBA Mortgage Applica, 01/21 (7:00): 0.8% prior
FHFA Housing Price I, November (9:00): 0.4% prior
Crude Inventories, 01/21 (10:30): +2.300M prior
January 26 - Thursday
Adv. International T, December (8:30): -$65.0M expected, -$65.3B prior
Initial Claims, 01/21 (8:30): 246K expected, 234K prior
Continuing Claims, 01/21 (8:30): 2046K prior
Leading Indicators, December (10:00): 0.5% expected, 0.0% prior
New Home Sales, December (10:00): 589K expected, 592K prior
Natural Gas Inventor, 01/21 (10:30): -243 bcf prior
January 27 - Friday
GDP Deflator, Q4 (8:30): 2.1% expected, 1.4% prior
GDP-Adv., Q4 (8:30): 2.2% expected, 3.5% prior
Durable Orders, December (8:30): 3.0% expected, -4.6% prior
Durable Goods -ex tr, December (8:30): 0.5% expected, 0.5% prior
Michigan Sentiment -, January (10:00): 98.0 expected, 98.1 prior
End part 1 of 3
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